Change comes to IT hub

By Wohn Dong-hee , Yoon Chang-hee
JoongAng Daily. June 11, 2004

Teheran Valley, the hub of Korea’s information technology businesses, is undergoing a major facelift.

Companies doing business based on pure technology are being booted out by more profitable entertainment enterprises, such as game developers, mobile content creators and filmmakers. Its name inspired by California’s Silicon Valley, Teheran Valley is a progressive commercial zone in southern Seoul that has been home to numerous venture companies, especially IT and Internet-related companies. Concentrated between Gangnam subway station and the World Trade Center, the area has served as a breeding ground for high-tech firms.Until now, that is. Earlier this year, two top corporate communications network providers abandoned this hotbed.

Locus Technology left the ASEM Tower and moved north of the Han River to downtown Seoul in March. Bridgetech also left Samseong-dong, relocating to Yeouido, abode of security firms, broadcasting companies and politicians. Internet companies Dreamwiz, Inicis and Interpark, and Ahn Lab, a security solutions developer, have already left for other areas of Seoul.

These moves are viewed by the industry as a symbolic event. “Since most tasks are performed online, there is no need to pay the steep rent of Teheran Valley,” said Kim Sung-ho, director at the Korea Internet Corporations Association. He was referring to monthly rent that starts at 15.2 million won ($13,100) per square meter.

Venture business analysts have a broader interpretation of this phenomenon. “Teheran Valley has changed along with the economy,” said Kim Hyung-ju, director of the Venture Business Research Center. “This area is not a venture valley, it’s where one can see which industries are making money. A few years ago, that was IT ventures. But not any more.”

Companies such as NHN, which runs an Internet game portal, and mobile game company Gretech are settled in at Star
Tower, which boasts the highest rent in Seoul. Nexon and NC Soft, major game developers, occupy seven buildings in the area, while Neowiz, an online community and game provider, uses three floors in the nearby ASEM Tower.

CJ Entertainment, a comprehensive entertainment group, and CJ CGV, a multiplex cinema chain, are new kids on the block, joining other film distributors and producers such as Showbox, Megabox and Sidus, that are not natives either.
“Game companies are here because it’s great to have developers close by so we can exchange market trends and information. It’s also because we’re making enough to manage the rent,” an official at Nexon said.

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